Thursday, May 30, 2013

Representative
Elaine Nekritz (Northbrook) is still pushing the numbers as the reason to pass
SB1 in the Senate and get it to a willing, waiting Governor to sign. Forget
the other stuff.

Forget about the promised court
challenges?

Forget that those numbers are the
result benefits stripped from public employees in a State with a Constitutional
Contract Clause?

Forget recent arguments by We Are
One that savings in SB2404’s “consideration” would be four or more times higher
than what Representative Nekritz and her spokespersons originally maintained
for SB2404?

And
now, forget about SB1’s forcing Tier
One employees into the same overpayment of earnings for less than adequate
retirement benefits?

Finally,
forget about the eventual issue of
non-compliance with the Social Security Administration for creating a
retirement scheme that will not meet Federal as a retirement structure?

Yep. Forget about it.

You seriously think we care?

According
to Rich Miller’s Capitol Fax, a spokesperson for Nekritz responded to the
latest issue of federal non-compliance with, “Simple answer is it’s an issue that’s not
immediate — probably 10-12 years down the road — and could be addressed later.
It shouldn’t stand in the way of a real solution like SB 1” (http://capitolfax.com/).

Like you
fixed Tier Two?

You’ll
probably fix that later too? Probably an
issue that’s not immediate until 25 or 30 years down the road. Meanwhile, Tier Two people will continue to
pay off the debt that legislators like Representatives Nekritz and others
accumulated by taking the money from public employees. Representative Nekritz called it “diverted not
taken”; Fred Klonsky called that “ a distinction with no difference.”

Meanwhile,
just keep looking at the numbers. The
numbers, look at the numbers.

Wednesday, May 29, 2013

Fragged: (military/ Vietnam) – wounds
or death caused by military FRAGmentation weaponry, like grenade, mortar, or
landmine. The urban dictionary also explains it as political maneuvers to
destroy the marginalized as a result of friendly fire or perhaps something like
a remnant of SB1 (http://www.urbandictionary.com/define.php?term=fragged).

SB1,
Madigan’s principle piece of draconian and unconstitutional cuts to active and
retired public sector workers has been held enthralled in Senate Leader
Cullerton’s pension committee, but Cullerton may allow various pieces of the SB1 bill
to arrive unattached on the floor of the Senate in order to either appease
Madigan, test the viability of Madigan’s SB1, or demonstrate the Senate’s
unwillingness to abandon their own bill: SB2404. Only Madigan and Cullerton truly know. Either way, we in public sector will take the
pain for Springfield’s decades of non-payment to our pensions.

It
is likely that these deadly shards and splinters of SB1 could become subject to
voting in the next two days. Please call
your Senator to dissuade them from voting “yes” on such unconstitutional segments
of SB1. From We are One:

•HB 1165 (deep COLA cuts) is opposed by
the coalition. It caps cost-of-living adjustments (COLAs) at extremely low
levels and delays all COLAs for five years or until age 67, whichever comes
first. The caps alone have the effect of reducing the value of a pension by
one-third to one-half after twenty years in retirement.

•All the while, senior citizens – as major consumers of health
care services – are one of the most at-risk demographic groups subject to
inflationary pressures. The bill makes it near impossible to keep up with the
rising cost-of-living.

•HB 1166(retirement age
increases) is opposed by the coalition. It increases
retirement ages anywhere from one to five years. Employees under age 35 would
face a five-year increase, employees between age 35 and 40 would face a
three-year increase, and employees between age 40 and 45 would face a one-year
increase.

•It contains no consideration for employees with
physically-demanding professions, such as police officers, fire fighters,
corrections officers, and nurses.

•An increase in retirement age effectively causes an individual’s
accrued benefits to lose 6% in value for each year of increase. A younger
worker – under the age of 35 in this instance – would lose 30% of his or her
pension’s value if this amendment became law. Even slightly older workers –
those between 35 and 40 – would face a loss in value of 18% upon retirement.

•HB 1154(pensionable salary
caps) is opposed by the coalition. It puts a cap on the
amount of salary that qualifies for a pension.

•The bill fails to recognize the mandatory overtime worked by
many public servants.

•Caps on pensionable salary also create disincentives for hiring
and recruiting for critical public professions, particularly ones that require
advanced degrees, such as those in the medical or higher education fields. It
can also hurt filling these types of civil service positions, which are often
more cost effective than contracting out for expensive, specialized services.

•

SB 1 (Speaker's mega-bill) is opposed by the coalition. It essentially
packages these three pension-cutting House bills together into a single,
destructive piece of legislation.

Call 888-412-6570 NOW! Tell your friends and families to make the
call. Tell them NO to SB1, HB1154,
HB1166, and HB1165!

My
mother loved watching George Sanders in old movies where he played the rake, a
character he performed over-frequently.
“He’s so oily,” she’d remark, “like you’re violated just by listening to
him.”

Were
my mother a public school teacher she’d say the same thing about the Chicago
Tribune and its Editorial Board.
Teachers know only too well what it feels like to be violated by the
oleaginous wording of the Trib’s editorials, thanking them profusely as first
responders and educators and later reminding them they’re undeserving and nasty
union creatures.

I’m
sure Speaker Madigan ignores this bipolar parenting by Mr. Dold and his group
of editors too. After all, last month it
was “All Roads Lead to Madigan”: an expose on the dark-creature who controls
all things political and otherwise in the state. Today, it’s “Mike.” Today it’s promises of ice cream. Today it’s mocking and unctuous, but a reader
(especially a teacher who has or is being violated) can read the urgency.

In
fact, “Mike” had earlier released his emissaries Representative Nekritz and
Representative Senger to denounce SB2404 as falling precipitously below the
numbers of “Mike’s” bill – SB1. After
their stern condemnations, actuarial computations revealed more would be gained
from SB2404 than they had projected.
Capitol Fax was quick to point out the issues, and Representative Senger’s
offices worked to control her mathematical bungling (http://capitolfax.com/wp-mobile.php?p=18419&more=1).

Indeed,
TRS also states “Sponsors
project that Senate Bill 2404, if enacted, would reduce the total unfunded
liability of the five pension systems by $8.5 billion to $15.7 billion. The projection
is that SB 2404 would save the state between $45 billion and $51 billion in
future pension expenditures. The projections say that the bill would “free up”
$850 million in the fiscal year 2015 state budget for other purposes”(http://trs.illinois.gov/subsections/press/PensionReformProposals.htm).

Nevertheless,
the Tribune urges “Mike” to put pressure on the Senate to secure the seven
votes needed to get SB1 passed, if
Cullerton (whom they refer to as a bull-headed Peter Pan) will release it to
the floor. They smoothly remind “Mike”
and their readers that “about $1.9
billion would be freed for fiscal year 2015 should…the courts uphold your
plan.” (Read that should to be IF) Six of the seven votes may come
from those who voted present or did not vote at all.

Those
six Senators are listed below. While
you are calling your own Representative or Senator to tell them how you want
them to vote on SB1 or SB2404, you should make the call to these others who
are/were on the fence originally.

Saturday, May 25, 2013

“There
is more hope for a fool than for someone who speaks without thinking.”
(Proverbs 29:20 – New Living Translation)

According
to Representative Tom Morrison (District 54 – Palatine), his bill HB3303 surpasses
the two competing bills currently in the General Assembly that deal with
pensions: Madigan’s SB1 and Cullerton’s SB2404.

Morrison’s
bill, which has the backing of Tea Party colleague Representative Ives and new
Senator Oberweis, “provides a clear path toward sustainability by converting
the entire system into a modernized 401K-style contribution plan. Private and public entities have embraced
these types of contribution plans because they are sustainable and serve the
ultimate purpose, ensuring an individual’s retirement…The economy is dynamic,
individuals are living longer, and the government - which is supposed to serve
taxpayers, not the other way around – must change its retirement system to
reflect these new realities” (Representative Morrison in email response to
questions by Robert Zahniser, May 22, 2013).

In
other words – stop the pension, freeze current payouts for residual actives,
and provide 401K’s like they do in the private sector.

What
Representative Morrison omits or overlooks in his tutorial to Mr. Zahniser is
that 401K’s are not accepted as a valid retirement program that can meet
federal muster by the Social Security Administration. In fact, 401K programs are simply self-directed
savings plans offered by some companies and on occasion with matching
incentives for employees to save funds to augment federally acceptable
retirement programs like Social Security or a qualified Pension Program.

Note: A 401K does not meet
federally acceptable levels as a legitimate retirement program for public
school teachers.

In
Illinois, like almost all other states, public employees face the Windfall
Elimination Provision (WEP), which provides a substantial offset to any
earnings outside the public arena in which that same employee paid social
security taxes. Public employees like
teachers in Illinois do not pay into social security; instead, the state
instituted the pension system in 1939, and opted out of the payments to Social
Security. Instead of paying his own 6.3%
of income to the federal system, the public teacher in Illinois pays 9.4 %
toward his pension/retirement contribution.

In
the spring of 2010, SB1946 passes
the General Assembly in less than a day and established Tier Two. That
change in benefits included increased retirement age (67), a maximum
pensionable salary calibrated to social security, a simple COLA with lesser
increases, and the same payment of 9.4% in contribution despite reduced
benefits.

Note: It is also very likely
that Tier Two does not meet federally acceptable levels as a legitimate
retirement program for public school teachers.

Comptroller
for the State of Illinois Judy Baar Topinka sagely warned in her 2011 Fiscal
Focus publication: “The new ‘Tier Two’ pension benefits for non-coordinated
systems may no longer meet the minimum standards for the Social Security tax
exemption. If the IRS determines that
the new plan no longer provides sufficient retirement benefits, the employees
and their employer would each owe 6.3% of payroll for Social Security taxes for
coverage in addition to current pension contributions. It is not clear whether this would apply to
all employees in the plan or just those who fall below the Social Security
requirement” (http://www.ioc.state.il.us/index.cfm/linkservid/C0426A73-1CC1-DE6E-2F485B26D3820194/showMeta/0/
).

At
first, one might think that bill is going to fall on the State of Illinois – an
additional 6.3% of salary for each Tier Two employee – and perhaps some Tier
One’s as changes like Representative Morrison promotes are applied? That’s a lot of money. A real lot.

Note: But, believe it or not,
it will be the local school districts who will pay for this possible, probable
penalty for not meeting federal standards.

When
determining responsibility for the payment to meet a federally acceptable
retirement program, the “common law control test” is used to ascertain fiscal responsibility
to pay the Social Security payment of 6.3%.
While the common law test has several aspects, one primary determiner is
whether “a relationship exists between the worker and the firm they work
for…(and)…the employer has the right to tell the employee what to do, how,
when, and where to do the job” (www.ssa.gov).
This reasoning is reinforced in 1950, and it was first established in
1939, when the Pension System was advanced to replace Social Security for
public teachers in Illinois.

Tier Two is a ticking financial time bomb,
just waiting to go off.

According to
Kathleen Farney, a director of research at TRS, roughly 3000 Tier Two teachers
currently work in the public system in Illinois; that is, an incoming number of
about 1000 annually since inception. According
to the TRS Financial Annual Report of June 2012, the average age of an active
in Illinois was 42 with an average of 12 years of earned service. As would be expected, the population of Tier Two
workers will inevitably increase as more and more Tier One teachers leave the
workforce, and the exodus of Tier Two workers from the profession will begin
after 2035 and swell moving forward to 2045.

Even the
director of TRS, Richard Ingram, is counted among that number, and the
inequities of his financial position were not lost on him. “It is what it is. I pay the same 9.4% of my salary towards my
pension that everybody else does. The value of our benefit only costs about 5
percent or a little less. Half of what I’m contributing every two weeks is
somethingI’m never going to see or never get the benefit of. It’s monies that
reduce the cost of the state” ( http://www.sj-r.com/top-stories/x1274367255/Tier-2-teachers-helping-pay-off-states-pension-debt
).

Interestingly,
when 2035 begins to roll steadily on to 2045, The Social Security System may
want to weigh in as well. And any
comptroller sitting in an office in a local district might want to consider the
impact that this yet-unopened gift from General Assembly will might provide in
a few decades.

And for
local districts? They may be worried
about the possibility of a future Madigan Cost Shift, but he’s scored already!

About Me

I am a retiree, political activist, social advocate and community volunteer. I taught at Lyons Township High School in LaGrange for 34 years in the Language Arts classroom and worked as an administrator for several years. My current avocations include various community outreach and assistance programs. Having benefitted from employment in a collegial, reflective teaching environment that encouraged dedication and professionalism, I continue to seek the promotion of education at all levels as a long-term effort combining talent, perseverance, commitment, and constant professional growth - not a blind adherence to a business model of measured production.

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